On October 16, the U.S. SEC approved the Bitcoin futures ETF issued by the fund management company ProShares. On October 19, U.S. local time, ProShares CEO Michael Sapir pressed the bell key on the New York Stock Exchange, and the bell recorded Bitcoin an all-time high in its history, the ProShares Bitcoin futures ETF was officially launched on the New York stock exchange platform NYSE Arca under the symbol BITO. At 9:30 a.m. Eastern Time on October 19th, shortly after the US stock market closed, BITO’s trading volume exceeded 23.9 million shares. Based on the closing price of US$41.89, the trading volume exceeded US$1 billion. This brand-new ETF set a record for the second-highest turnover on the first day in history. As of press time, the price of Bitcoin had topped 67,000 USD, standing at the highest point in history, which also prompted the crypto derivatives market to once again get attention.
Since 2019, crypto derivatives have begun a rapid development stage. Innovative products such as delivery contracts, perpetual contracts, leverage, options, ETFs, etc. have continuously entered in the eyes of users. The emergence of multiple derivatives is conducive to the prosperity of crypto. This time the US SEC through the Bitcoin futures ETF, has pushed the derivatives market to a climax.
As the leader of the entire crypto market, the crypto trading platform has been at the forefront of the market in terms of the layout and update iterations of crypto derivatives. The launch of innovative products that are welcomed by the market is the consistent concept and original intention of the design of the crypto trading platform. After futures, options, and swaps, leveraged ETFs have become the most watched products in the crypto derivatives market.
First of all, I will tell you about leveraged ETFs. Leveraged ETF products are a kind of financial derivatives that are very popular in traditional financial markets. It is a trading product that achieves a certain multiple (such as 3 times) of the target daily asset return rate under the premise of a given target asset (such as BTC). If the price of BTC rises by 1%, the net value of the corresponding 3x leveraged ETF product will rise by 3%; and the net value of the corresponding -3x product will fall by 3%.
Leveraged ETF is a perpetual product. After expiration, the price will not completely return to zero, so there is no risk of liquidation. Unlike traditional leveraged trading, users do not need to pay any margin when trading leveraged tokens. Investors can buy or sell in the secondary market at any time to achieve the purpose of trading leverage.
Fixed leverage tokens are priced in USDT, and the trading mechanism is similar to currency trading. A leveraged ETF essentially corresponds to a unit share of a fixed leverage base. The base management ensures that the base return anchors a fixed target multiple of the underlying asset’s return. Investors can obtain the underlying asset by trading ETF product shares to a specified multiple of the income.
When the volatility of the underlying asset in the opposite direction exceeds a set threshold, by introducing a rebalancing mechanism, the fund manager will re-adjust the fund position to ensure that the net loss of the fund will not exceed a certain limit.
In short, leveraged tokens are actually ERC20 tokens with leverage function. Through the risk control measures of basic management, ETF investors can avoid the worries about liquidation and obtain a certain leverage multiple of the return on the underlying asset.
From the perspective of market demand, under the condition of insufficient funds in the market, users want to achieve the growth of their own asset gold standard. It is not enough to rely solely on spot transactions. Therefore, leveraged tokens have begun to be favored by more and more market users.
The current crypto trading platform has always been in the stage of stock competition. Whoever can meet the needs of market users and give users a better user experience can win the attention of more market users. Therefore, whether the transaction is convenient and smooth, and whether the types of leveraged tokens are complete. Enrichment is the basic condition for users to choose leveraged ETF token trading platform. ZT Global launched the leveraged ETF area as early as February 20, 2020. The early launch time also indirectly shows how much ZT attaches importance to the crypto derivatives market.
In order to enhance the trading experience and reduce market risk, ZT has imposed a position limit on the currency of ETF leveraged tokens on January 8, 2021, and the maximum position limit for a single currency is 5000USDT.
ZT Global’s leveraged tokens are also very diverse. According to ZT Global’s official display, ZT has launched ETF transactions in 90 popular currencies such as BTC, ETH, EOS, XRP, BCH, LTC, BNB, OKB, HT, ATOM, and LINK. The various popular sector currencies are complete, and the leverage multiples are flexible and diversified into three levels of 1x, 3x, and 5x, which can meet the various investment needs of users at different levels. For example, BULL is three times longer than OKB (OKBBULL). It is an ERC20 token with its own leverage. The corresponding return is 3 times the return of OKB. DOT5L is 5 times DOT for long ETF products, and the rise or fall is about five times that of the DOT market.
After meeting the basic product needs of market users, ZT ETF products also have the following two advantages:
*1. Spot trading, no margin required*
Users can buy leveraged ETFs on ZT just like ordinary spot purchases, freeing users from problems such as margin and liquidation risks. Taking 3 times long BTC (BULL) as an example, the user only needs to check the price and net value-entered in the purchase quantity-choose to buy BULL, without any other operations.
*2. Compound interest effect, risk control*
Leveraged ETFs will automatically transfer position gains. That is, if the leveraged ETF purchased by the user has a floating profit (there is no floating profit before rebalancing), then the floating profit will make the leveraged ETF position at the next rebalancing Increase, that is, to add a position that is 3 times the floating profit, making the return form a compound interest model.
At the same time, leveraged ETFs have their own risk control mechanism (see the rebalancing mechanism section for details). For example, if the user is 3 times long on the BTC contract, and then BTC drops by 33%, then there is no doubt that the user’s position will be liquidated and there is nothing left. However, if a user buys BTC 3 times bullish (BULL), leveraged ETFs will fall according to market conditions and adjust their positions through a rebalancing mechanism to prevent user positions from being liquidated. Even if the BTC price drops by 33%, users still have positions Asset’ssurplused.
In order to repay the long-term support of the majority of users on the platform, ZT has launched a popular ETF token airdrop event. During the period from 00:00 on July 18, 2021 to 00:00 on October 18, 2021 (UTC+8), the transaction volume is greater than or equal to 1000 USDT. Users will receive 1USDT equivalent ETF token rewards; users with an ETF trading volume ≥200USDT will receive 2USDT equivalent ETF token rewards, and users who qualify for airdrops can pay attention.
At present, the crypto exchange trading platform is in a serious development stage on how to break through the existing bottleneck in the stock market and open a new path to better serve the crypto users is the main focus of the current crypto trading platform. Standing out depends more on the platform’s keen market sense of execution and creativity. It is expected that ZT will be able to innovate and develop in the context of the current crypto market reshuffle, and walk in the forefront of the market.
About ZT Global
ZTB.im is a platform that provides users with a convenient trading experience and secure storage for crypto assets. It has its operation strategy built on the changing needs of the community. 70% of the profit will be shared with the community to ensure future governance, participation, decision making, voting rights and equity sharing.
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